Defense throws the book at its software buyers

'Our intent is not to limit what they buy. We're trying to offer choice, and we want to offer the best pricing.' 'FLOYD GROCE, CO-CHAIRMAN OF THE DEFENSE DEPARTMENT'S ESI WORKING GROUP

The Defense Department is turning to the good book for help in getting the message across that contracting officers must use enterprise software agreements when they buy commercial software.

The Defense Enterprise Software Initiative working group has filed a request to have a paragraph added to the Defense Federal Acquisition Regulation Supplement requiring contracting officers to use the Defense inventory for commercial software and maintenance services.

DFARS is 'the bible for contractors,' said James S. Clausen, co-chairman of the group.

There is a two-year-old mandate requiring the practice, but some agencies were unaware of the rule, he said, which prompted the DFAR proposal.

Four years ago, CIOs from several Defense agencies met to discuss ways to improve the software acquisition process. At that time, overspending and overlicensing were the norm.

Defense officials felt they could save money by requiring procurement officials to buy in bulk and negotiate large-scale licenses.

ESI was their solution to the problem.

Also known as Point and Click IT Shopping at Lowest Cost, ESI became the program that contracting officers were required to consult first when buying commercial software and maintenance services, according to a July 2000 memorandum written by the department's deputy CIO.

Up to 90 percent off

The blanket purchasing agreements offer DOD agencies discounts of as much as 90 percent off list prices for large software buys, officials said. Communications software, database products, office automation and security tools are some items procurement officials can buy through the agreements.

Vendor

Discount off GSAschedule pricing

Money saved(in millions)

Computer Associates International Corp.

64%

$11.8

IBM Corp.

31%-98%

$6.0

IBM's Tivoli Systems Inc.

64%-90%

$7.5

Microsoft Corp.

52%

$87.0

Oracle Corp.

2%-84%

$646.0

Sybase Inc.

64%

$5.8

'Our intent is not to limit what they buy. We're trying to offer choice, and we want to offer the best pricing,' said Floyd Groce, the other co-chairman of the working group. 'But we already have licenses available. We're saying customers need to acquire through the inventory and first consider what we have.

'If we don't have an agreement for the product they're looking for, they can continue looking.'

If an agency can't find the software through one of DOD's enterprise agreements or is not satisfied with the price or terms, it can apply for a waiver to use another vehicle.

The ESI policy is fairly well-known among Defense IT workers, Clausen said, but 'we do have hiccups from time to time. There was and still is some redundancy.'

Some in DOD are not familiar with the memorandum, Clausen and Groce said, and some purchasers still overspend.

Comments sought

That's why the working group filed the DFARS request, which now is open to a 90-day public comment period. After April 1, the DFARS Council will rule on the request, Clausen said.

The working group is asking that the language be included in the DOD 5000.2-R, a regulation that outlines mandatory procedures for major Defense acquisition programs.

There is also a push to start managing commercial software as an asset. Defense IT officials want to centralize the distribution and tracking of software using enterprise management tools.

The DOD-wide Software Asset Management Framework is expected to require software product managers to oversee individual agreements. This would require tracking whether an agency already has a license for the software it is ordering or needs a new one. It also requires contracting officers to get feedback from customers on their satisfaction with the pricing and terms of the agreements.

'We would like ESI to become the primary strategy for licensing of commercial software,' Groce said. 'One of our goals is to start managing commercial software as an asset, not just to get best pricing.'